Tenant Activists Slap Landlord, Win Big Bucks

Frank Palazzolo, a member of the Voice's "Ten Worst Landlords" list, has lost a long-running court battle with tenant activists.

Back in 2003, Palazzolo took activists to court for organizing tenant meetings in his buildings, some of which are the most poorly maintained in the Bronx. The Northwest Bronx Community and Clergy Coalition and Highbridge Community Life Center fought back, arguing that the lawsuit was a way to intimidate tenants who were trying to protest slum conditions.

All these years later, Palazzolo companies have to shell out $420,000 — plus interest — to compensate the activist groups for the money they spent fighting him.

Palazzolo sits at the helm of a network of crumbling buildings in New York. Last week, another group of tenants sued him in housing court, asking the city to take over his building at 2710 Bainbridge Avenue so it can be run by an independent administrator. The Bainbridge building was featured prominently in the two-part Voice series on landlords.

Harvey Epstein, a lawyer for the tenant's groups, tells the Voice that the ruling late last month should "send a message to other landlords not to sue organizers."

When the landlord sought a restraining order seven years ago to prevent tenant activists from entering his buildings, media coverage at the time pointed out that it was a strange case: For one, Palazzolo denied even owning the buildings. (The city, through a corporate records subpoena, was able to later determine that he did in fact control them.)

Palazzolo's ploy was a SLAPP (an acronym for "strategic lawsuit against public participation"), a familiar tactic by real-estate developers but rarely used by landlords. SLAPP suits aim to stifle protests and even just ordinary dissent by the public against corporate maneuvers. The community groups countersued immediately, under a statute protecting free speech from SLAPPs.

In August 2008, Bronx Supreme Court Justice Sallie Manzanet-Daniels rebuffed the landlord. And on March 24, another Bronx Supreme court judge, Lucindo Suarez, vindicated the Bronx tenant groups, awarding them the $420,000.

The judge wrote that "the evidence established that the devotion of resources to the defense against [the landlord's] action, to the detriment of the core fund-raising and development activities of the organizations, resulted in defendants' loss of competitive grant funding" of $210,000 in 2004 and $210,000 in 2005.

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